AMP punters made to forfeit $1.2m

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Two brothers whose bet on insurer AMP's shares earned them nearly $10 million were ordered yesterday to forfeit about $1.2 million and convicted of structuring cash transactions to evade regulatory scrutiny.

Judge Michael Strong told the Victorian County Court he did not believe the explanation given for John and Michael Fares's string of bank withdrawals and deposits that alerted the banks and Australian Federal Police to their dealings.

John Fares, 38, and Michael Fares, 39, pleaded guilty to two counts of structuring cash transactions involving 144 transactions of less than $10,000 to avoid financial reporting requirements.

Judge Strong convicted the brothers and ordered the forfeiture of a $1,177,775.03 and released them on a $5000 good behaviour bond for three years.

The brothers, both of Williamstown, were planning to use the $10 million to buy an investment property in Altona and did not want National Australia Bank, for whom John Fares then worked as an accountant, to freeze the money, the court was told.

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Judge Strong told the court: "I do not say it is false. I say it is implausible. It does not convince me at all."

The nation's chief securities regulator, the Australian Securities and Investments Commission, and NAB, unsuccessfully investigated the brothers for insider dealing after they bought $2.4 million of contracts-for-difference (CFDs), a derivative-based method of betting on rising AMP shares. They sold the shares the day after NAB announced it was building a stake in the nation's largest insurer, netting a profit of almost $10 million.

Judge Strong told the court that only the brothers knew the real reason for their actions because they had been under no obligation to give evidence, nor to explain to the investigators.

Defence counsel claims that the brothers feared that NAB would freeze their account - particularly when the brothers claimed they intended to use the bank for financing the property development - were unconvincing, the judge told the court.